Analysis of Managing Small and Medium Enterprises: Challenges

This report provides an overview of managing Small and Medium Enterprises (SMEs), focusing on the nature of entrepreneurship, SME start-up processes, business concepts, and competitive advantages. It examines the current level of demand, competitive environment, and the growth and development of a hypothetical business, Verdant Leisure, to date. The report further explores the challenges of managing and running the business, the SME's current growth and development strategy using the Ansoff Matrix, and potential government support measures available to help the business overcome these challenges. The analysis includes Porter's Five Forces model to assess the competitive landscape, and emphasizes the importance of innovation, team building, and flexibility for entrepreneurs. The report concludes by highlighting the need for SMEs to adapt to changing market conditions and leverage available resources for sustainable growth.

Managing Small
and
Medium Enterprises

Table of Contents
INTRODUCTION................................................................................................................................3
MAIN BODY......................................................................................................................................3
The nature of the entrepreneur behind the venture..........................................................................3
The SME start-up processes............................................................................................................3
The business concept and competitive advantages..........................................................................4
The current level of demand and the competitive environment.....................................................4
The growth and development of the business to date......................................................................5
The challenges of managing and running the business...................................................................5
The SMEs current growth and development strategy......................................................................5
Government support measures that may be available to help the business overcome the
.........................................................................................................................................................6
challenges faced-: ...........................................................................................................................6
CONCLUSION....................................................................................................................................6
REFERENCES.....................................................................................................................................7

INTRODUCTION
The modern world business environment has changed rapidly in the last few decades.
Nowadays, an organisation can easily conduct their business activities across the boarder.
Globalisation plays an important role in increasing the world economy because it generates the
opportunities for the enterprises to sell their product, services, technologies across the boarder al
around the world. Business enterprises is a structured form by an individual or group of people to
make monetary benefits. The person who take a initiate to established a business in known as
entrepreneur. The main of starting a new business is to meet a specific need or filling a certain gap
in the market. Small and medium enterprises(SME) is a combination of both manufacturing and
service enterprises. Small and medium enterprises are the business structure whose annual turnover
and all the investment in assets such as plant and machineries are less in cost as compare to large
enterprise (Badini, Hajjarand Kozak, 2018).
MAIN BODY
The nature of the entrepreneur behind the venture.
Entrepreneurship can be considered as a thought process of establishing a new business or
enterprises. It is a quality and willingness to create, manage and run a business operation effectively
and efficiently. It can be categorized into small or home commercial enterprise to international
organization. The 4 types of entrepreneurship are as follow-:
Small business enterprise entrepreneurship
Scalable start-up entrepreneurship
Large organization entrepreneurship
Social entrepreneurship.
Some characteristics of entrepreneurs are as follow-
Innovative- The entrepreneur of verdant leisure should have highly imaginative and
innovative ability or skill to generate new strategies, ideas before starting a company to earn profit.
For capturing new customer base verdant leisure should modify their product in such a way that can
positively affect the customer's mind.
Team building- A successful entrepreneur should have the complete knowledge about their
strengths and weaknesses regarding to their business enterprises. The entrepreneur should develop
such kind of team that have proper abilities according to their respective fields. The skilled team
can confidently deals with the issues that can harm the organisation.
Flexible- An entrepreneur should have the capability to change their attitude according to the

current situation. To build a powerful market position, a businessperson should be able to embrace
modification in their trade good and services when needed (.Pratt, 2020).
The SME start-up processes.
As UK promotes and encourages entrepreneur to established new business in their country .
In starting they should write a complete business plan as per their requirements. The elements such
as executive summary, contents page etc. will be a part of this business plan. After completing first
process than an individual should select a unique business name and brand logo that has never been
used by any organisation. Than after selecting the logo and name the owner of the firm should apply
appropriate business plan as per the pros and cons present in their business operations. After
completing all the basic process the owner of verdant leisure should register their company with
HMRC, by this the firm is able to pay taxes on income earned by them. A proper setup of billing
system should be adopt by verdant leisure. Various online software will help them to record their
bill effectively and efficiently. Funds plays an important role in any organisation to run their
operations, that is the point where owner can assess small business loan on their companies name.
After completing all the business establishment process the owner should appoint a experienced and
skill charted accountant which give their advice on tax planning, finance planning and various
facilities regarding their organisation. At last, the administration of that particular business should
make their organisation so strong, which can help verdant leisure to stay safe from small legal
issues (Rosa, and Scott, 2019).
The business concept and competitive advantages
Verdant leisure is a chain of holiday parks in the united kingdom. It bring off self catering
motionless procession holiday parks that also exclude tour and camping facilities. The organisation
is founded in 2010 and now expanding their business operation day by day. They provide various
holiday packages or tours in low cost to their customers as compare to other travelling agencies
present in UK. They also provide various luxurious facilities which can be enjoyed by their
customers all around the world. Competitive advantages helps verdant leisure to produce more
affordable and quality goods and services produced by their competitors. Some of the competitive
advantages are as follow:-
Technology based advantage- An organisation can accomplish their set goals and aims by
making the change in their business operation such as adaptation of various new technologies which
can help them to produce new and innovative product in their respective market industry. The new
innovations in technologies can help verdant leisures to make their business operation easy and

effective.
Sustainability- It is also one of the most important competitive advantage as it attracts more
families to move in familiar environment. They can help in increasing in the demand of holiday
packages which attract more and more customers. Verdant leisure uses green tourism to offers its
travelling services (.de Abreu, M.C.S. and Ceglia, 2018).
The current level of demand and the competitive environment
In order to analyize the competitive environment, the proper framework should be develop
by the administration of verdant leisure. Their is a porter 5 forces model present in context to
verdant leisure. Porter's five forces model is a tool used for the identification of root of
competitions in an organization or sector.
Buyer Power-The verdant leisure is a tour and travel agency that have number of customer in
United kingdom. The buyers of services are not as much great in the power because satisfaction
level is much high in the region of price and service quality. The buyer power is high. They have a
high prospective of either making a company likeable or unlikeable. The verdant leisure have to be
very sure about the menace and maintain the prices according to customers,so that the customer
remain satisfied.
Competitive rivalry(high)-The competition level of the verdant leisure is very high because of its
brand recognition and they are well known in all over the UK. The competitive risk is very high.
For example- holiday packages etc. are provided by the big travel agencies that attracts the
customers. If the cost of the competitor service is low then there is high chances of consumer
switching (Masood and Sonntag, 2020).
Threats of substitutes -the nature of the user in accordance with the service is changeable .the
consumer always try to catch or enjoy new experience in their life. The power of substitutes is
moderate. Same usable services(substitutes) available in the market , will change the mentality of
the consumer to displacement to another one from verdant leisure. The things which attract the
customer are prices ,qualities ,types of packages, but there are some other customers who
considered the brand reputations in the market.
Threats of new entry-the entry of new entrants can bother the existing company. The verdant
travel supply its product and services in UK but if a new entrant came it can cause a disturbance to
the organisation. The power of new competitor is moderate. Location, social group and different
kind of people plays the key role . The client know everything about the active company like its
brand name ,brand value and they also know that the new entrant does not meet the power of the old
one (. Franco, Haase and Rodini, 2020).

Suppliers' power-Just like the customers ,the supplier also play an important role. Actuality and
emotional state of the suppliers also switches, thus the supplier power is high. If the firm has many
suppliers options than it can switch for the cheap alternative. Verdant leisure can collaborate with
different hotel's all around the world that will provide appropriate discount to the travellers.
The growth and development of the business to date
In starting there are only 50 employees present in the organisation of verdant travel, but after
seeing the growth and success of the business they have added more 50 employee in their
workforce. The company has successfully captured the market of Scotland and now it's main aim is
to capture the entire north part of UK. They are expecting the annual return of 20million dollar's in
their revenue. They are able to build a strong market position in travel agency section all around the
UK (Nakintu, 2021).
The challenges of managing and running the business
Starting a commercial enterprise is a momentous accomplishment for numerous entrepreneurs, but
running an organisation for a long period of time is a very big challenge. All kind of business
organisations are facing various kind of issues in doing the operation fluently and effectively. Some
of them are as follow:-
Lack of proper marketing- This is one of the major problem which is faced by small
business. Lack of using appropriate marketing techniques doesn't benefit's the organisation.
Influencer marketing is one of the best marketing strategy which can be adopt by small business
enterprises.
Money management- Having a strong and properly managed cash flow helps an
entrepreneur to run their business continuously. This is a problem which arises when an
organisation does not focus on their accounts department.
The SMEs current growth and development strategy
The Ansoff matrix model also known as product and service expansion model, is a tool and
techniques used for analysing and planning the strategies for the future growth of a firm.
Market penetration strategies
Market penetration is defined as the selling of goods and services in the already existing market.

Its a strategies to find the growth and opportunities in the existing market with the existing product.
Verdant leisure is a travel agency , after that it introduce the club-card point scheme in the same
market which played as a ace card in the market. This helps the company to gain the loyalty of the
customers.
Product development strategies
An organisation adopt this kind of strategy in order to develop new or upgraded product and sell
that product or services in the old captured market place. The company should conduct a proper
research and survey which will help them to gather the information regarding the customers needs
and wants from the product. In context to Verdant leisure, the management of this company
introduce tour guide, complete holiday packages, heavy discount and various other factor after
seeing the change in the requirement of their customers.
Market development strategies
This strategy states that a company is trying to capture the new customer base with the help of their
old and existing products. Verdant leisure operates at large level that can help them to takeover
other travel agencies in the area where they are intended to expand. This needs huge capitalization
to implement this process (.Johnstone and Hallberg, 2020).
Diversification Strategies
This is one of the most riskiest strategy present in the current world because in this strategy an
organisation attempt to create new product and serves that product into the new market place. An
organisation should have to change their entire business operation in order to achieve success in the
market. Verdant leisures diversified its services by offering hotel bookings, and car rental facilities.
They can further diversified themselves in marketing industry.

Government support measures that may be available to help the business overcome the
challenges faced-:
The government of UK will work in close cooperation with the devolved administrations in
Scotland, Wales and northern Ireland to make UK wide response. Their are certain principle which
encourages person to start business- In the close cooperation the UK government will workto
develop administrations in Scotland, Wales and Northern Ireland in order to develop the economic
growth of United Kingdom.
 Advised by the subject field- The UK government always try to encourage the small
entrepreneur to run their business smoothly and effectively with the help of various modern
tools and strategies. They also promote the small business owners through various new
opportunities which can enhance their business.
 Justice- The main aim or focus of the UK government is to stay fair and loyal with the all
age group regarding the formation of any legal formalities.
 Proportionality- The higher and legal authorities of United Kingdom has taken various
measures to control the negative effect of the virus in order to save the culture and living
being present in their country.
 Privacy- The UK government always try to safeguard the privacy of every individual and
always try to convey the clear or proper message to the general public regarding any
changes in the rules and regulation of the nation. The government of UK are taking various
initiatives to rebuild the economy of the which has been majorly affected by this pandemic.
 Transparency -The government of UK has taken the help of various scientific and technical
advices which helps them to be open in front of the public and parliament (.Mahdi, O.R.,
Nassar and Almsafir, 2019).
CONCLUSION
From the above report it has been concluded that globalisation plays an important role in
increment in the worlds economical growth. Innovative, calm and leadership are some kind of skills
than an entrepreneur should always develop before starting an enterprise. A complete start-up
process of an organisation is been shown in this project. Verdant leisures is a tour and travelling
agency which provide various travelling services. Some of the competitive advantages are also been
discussed in this file. Various challenges while managing and running a business are pointed in this

report. At last the various measures adopted by UK government that encourage entrepreneur to start
new business is a part of this report.
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